Delight, But Not Too Much
Authors: Dennis C. Ahrholdt, Siegfried P. Gudergan, and Christian M. Ringle
Journal: Enhancing loyalty: When improving consumer satisfaction and delight matters. Journal of Business Research, Volume 94, January 2019, Pages 18-27
Dr. Michael Gunderson, Director and Professor
This paper seeks to understand the role of satisfaction and delight on customer loyalty. The authors hypothesize that one can forecast repurchase intentions by assessing the degree to which the customer’s expectations were met or greatly exceeded. There is substantial marketing research that suggests satisfaction and delight are two related, but distinct outcomes of a customer interaction. Satisfaction is the experience relative to expectations of the customer interaction, which leads to confidence and security. Delight is vastly exceeding expectations. It creates a sense of enjoyment from a customer interaction.
Previous work had not considered these two variables together. The authors conclude that satisfaction is table stakes for loyalty. As satisfaction first increases, (the customer’s most basic expectations are met) there are big payoffs for increased loyalty. At higher levels of satisfaction, there are smaller amounts of additional loyalty. Alternatively, low levels of delight don’t contribute much to loyalty, but once delight hits a sweet spot, there are rapidly growing returns. At the highest levels of delight, the contribution to loyalty tapers off.
What this means for Food and Agricultural Business
For food and agricultural marketing and sales teams, loyalty might be the Holy Grail. Loyal customers provide a base for operations that use many fixed assets. Loyal customers are likely less costly to serve as the expensive establishment phase of the relationship is already completed. Loyal customers often provide free promotion by sharing their positive experiences with other existing and potential customers.
The Center for Food and Agricultural Business large commercial producer survey research suggests that a strong segment of producers identify as loyal. It depends a bit on product. Seed brands tend to garner greater amounts of loyalty than crop protection, crop nutrient and even machinery brands. The survey has not often thought about what the items are that lead to loyalty.
This article gives us two items to consider: satisfaction and delight. For a local agricultural retailer, satisfaction might simply be applying the right crop protection chemicals on the right field at the right time. Delight might arise when the applicator notes other issues and challenges observed while covering the field and stopping to share those with the farmer on the way to the next job. In a food processing business, one could easily see timely delivery to the next stage of the value chain as satisfactory, while providing a rush order when the buyer needs it could constitute delight—particularly if it’s free of charge.
When thinking about allocating resources to satisfaction or delight, investments to improve very low levels of satisfaction will have the biggest payoffs. Intuitively, business leaders understand this as table stakes. You have to deliver on the promises you make and make customers whole again if you fail. Many agricultural retailers work with the sales and services teams to ensure a customer’s most basic needs are met. This is related to another Quarterly Review article that considered the role of services in determining a firm’s financial performance (https://agribusiness.purdue.edu/quarterly-review/talented-people-and-strong-brands).
The story is a bit more complicated regarding the impact on loyalty of delight. Going far beyond the customer’s expectations can have big payoffs. The key is to find the sweet spot of delight so that it is clearly beyond satisfaction, but not so over the top the customer tunes it out as an anomaly. Sharing meaningful insights, performing service above the call or an exceptionally well-timed delivery could all lead to customer delight. If the experience is too impressive and brings too much delight, the customer could tune it out. Furthermore, the cost of delivering on that exceptional level of delight may never exceed the long-term benefits to the relationship.
Another unintended result of constantly delighting customers is the impact on employees. If the bar for acceptable performance becomes delight, employees might wear out quickly. This makes the cost/benefit analysis even starker. If employees are expected to greatly exceed satisfaction, I suspect they will also expect greatly enhanced compensation. A reward, perhaps as simple as publically acknowledging the effort, can go a long way in encouraging employees to delight customers when the situation warrants it.
What are your experiences with delight? Are you measuring satisfaction with customer surveys and net promoter score? How does your organization assess the difference between delight and satisfaction? If so, how do you consider the impact that has on loyalty? One time in the Center, we thought the Quarterly Review would delight our key partners. These days, it seems getting an issue out on time is satisfying them. Much like your businesses, we are trying to stay on the treadmill. Send your thoughts our way about delight and satisfaction.